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On the Distribution of City Sizes

  • Juan Carlos Cordoba

    (Rice University)

The city size distribution of many countries is remarkably well approximated by a Pareto distribution. We study what constraints this regularity imposes on standard urban models. We find that under general conditions urban models must have (i) a balanced growth path and (ii) a Pareto distribution for the underlying source of randomness. In particular, one of the following combinations can induce a Pareto distribution of city sizes: (i) preferences for different goods follow reflected random walks, and the elasticity of substitution between goods is 1; or (ii) total factor productivities in the production of different goods follow reflected random walks, and increasing returns are equal across goods.

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Paper provided by EconWPA in its series Urban/Regional with number 0302002.

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Length: 31 pages
Date of creation: 14 Feb 2003
Date of revision:
Handle: RePEc:wpa:wuwpur:0302002
Note: Type of Document - pdf; pages: 31 ; figures: included
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  1. Duncan Black & Vernon Henderson, 1999. "A Theory of Urban Growth," Journal of Political Economy, University of Chicago Press, vol. 107(2), pages 252-284, April.
  2. Yannis Menelaos Ioannides & Henry G. Overman, 2003. "Zipf’s law for cities : an empirical examination," LSE Research Online Documents on Economics 583, London School of Economics and Political Science, LSE Library.
  3. Masahisa Fujita & Paul Krugman & Anthony J. Venables, 2001. "The Spatial Economy: Cities, Regions, and International Trade," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262561476, June.
  4. Kwok Tong Soo, 2004. "Zipfs Law for Cities: A Cross Country Investigation," CEP Discussion Papers dp0641, Centre for Economic Performance, LSE.
  5. Rosen, Kenneth T. & Resnick, Mitchel, 1980. "The size distribution of cities: An examination of the Pareto law and primacy," Journal of Urban Economics, Elsevier, vol. 8(2), pages 165-186, September.
  6. Jonathan Eaton & Zvi Eckstein, 1994. "Cities and Growth: Theory and Evidence from France and Japan," NBER Working Papers 4612, National Bureau of Economic Research, Inc.
  7. Fujita, Masahisa & Mori, Tomoya, 1997. "Structural stability and evolution of urban systems," Regional Science and Urban Economics, Elsevier, vol. 27(4-5), pages 399-442, August.
  8. King, Robert G. & Plosser, Charles I. & Rebelo, Sergio T., 1988. "Production, growth and business cycles : I. The basic neoclassical model," Journal of Monetary Economics, Elsevier, vol. 21(2-3), pages 195-232.
  9. Lucas, Robert Jr., 1988. "On the mechanics of economic development," Journal of Monetary Economics, Elsevier, vol. 22(1), pages 3-42, July.
  10. Paul M Romer, 1999. "Increasing Returns and Long-Run Growth," Levine's Working Paper Archive 2232, David K. Levine.
  11. Henderson, J V, 1974. "The Sizes and Types of Cities," American Economic Review, American Economic Association, vol. 64(4), pages 640-56, September.
  12. Ioannides, Yannis M., 1994. "Product differentiation and economic growth in a system of cities," Regional Science and Urban Economics, Elsevier, vol. 24(4), pages 461-484, August.
  13. Stanley, Michael H. R. & Buldyrev, Sergey V. & Havlin, Shlomo & Mantegna, Rosario N. & Salinger, Michael A. & Eugene Stanley, H., 1995. "Zipf plots and the size distribution of firms," Economics Letters, Elsevier, vol. 49(4), pages 453-457, October.
  14. Xavier Gabaix, 1999. "Zipf'S Law For Cities: An Explanation," The Quarterly Journal of Economics, MIT Press, vol. 114(3), pages 739-767, August.
  15. Duncan Black & Vernon Henderson, 1997. "Urban Growth," NBER Working Papers 6008, National Bureau of Economic Research, Inc.
  16. Segal, David, 1976. "Are There Returns to Scale in City Size?," The Review of Economics and Statistics, MIT Press, vol. 58(3), pages 339-50, August.
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